Electric car tax credits & incentives for 2019
Last updated 1/17/2019
On average, the cost of an electric vehicle, whether all-electric (AEV) or plug-in hybrid (PHEV) is higher than that of a conventional gas powered car. However, there are a number of federal & state electric car tax credits and other incentives that can lower the upfront cost so EV drivers can take advantage of fuel savings and reduced emissions.
Federal incentives for electric vehicles
The Qualified Plug-in Electric Drive Motor Vehicle Tax Credit is the main federal incentive program for electric cars available in the United States. Under this program, the purchase of a new electric vehicle is eligibe for a tax credit worth $7,500 as long as it meets the following criteria:
- Purchased after December 31, 2009
- Uses a traction battery (as the vast majority of EVs do)
- Battery has at least 4 kilowatt hours (kWh) of capacity
- Uses an external plug-in source to recharge
- Has a vehicle weight rating of up to 14,000 pounds
- Meets emissions standards
The federal electric car tax credit applies to both all-electric vehicles and plug-in hybrid vehicles, and the actual amount you can claim varies based on car model. Before you decide between electric vehicles, be sure to check out exactly how much your new car gets you in the form of federal electric car tax credits.
This tax credit has a “phase out” built into the program that is dependent on the manufacturer of the car. The phase out will kick in at the beginning of the second calendar quarter after a manufacturer has sold 200,000 eligible AEVs and/or PHEVs. Most electric cars are still eligible for this tax credit; for example, current counts show that Ford has sold approximately 100,000 EVs, and BMW has sold 45,000. The phase out for this tax credit for vehicles purchased from these manufacturers will not be occurring anytime soon.
Of note, Tesla cars are no longer eligible for the full incentive. Only vehicles delivered by December 31, 3018 received the full credit. Vehicles delivered before June 30, 2019 will receive a credit of $3,750, those delivered between July 1, 2019 and December 31, 2019 will receive $1,875, and beyond that timeline no credit is available for Tesla.
After the purchase of a qualifying vehicle for personal use, electric car owners must fill out Form 8936 and report the credit from the form on the appropriate line of Form 1040 (Individual Income Tax Return). If you purchased an electric car for business use, the credit must be reported on Form 3800 (General Business Credit).
State and local electric car tax credits
Aside from federal incentives, there are electric car tax credits and rebates at the state level that you can use to save further on an electric vehicle purchase. This list is of state incentives and does not include utility/private incentives. The Alternative Fuels Data Center also has information on incentives from states, utilities, and private organizations.
|State||Electric Car Tax Credit Program||Description|
|Alabama||None available||None available|
|Alaska||None available||None available|
|Arizona||Residential Electric Vehicle Supply Equipment (EVSE) Tax Credit||Tax credit of up to $75 for the installation of EVSE in a house or housing unit an individual has built.|
|Arkansas||None available||None available|
|California||Plug-In Hybrid and Zero Emission Light-Duty Vehicle Rebates||Rebates for the purchase or leasing of AEVs and PHEVs with vehicles purchased before March 28, 2016 eligible for $5,000 in rebates. For vehicles purchased after March 28, 2016, rebates based on gross annual income.|
|Alternative Fuel and Advanced Vehicle Rebate (San Joaquin Valley)||$3,000 rebates of qualifying electric vehicles for residents and businesses located in the San Joaquin Valley.|
|Colorado||Plug-In Electric Vehicle (PEV) Tax Credit||
Credit of $5,000 of purchase or conversion and $2,500 for a lease of light duty EVs or PHEVs.
For light-duty, medium-duty, and heavy-duty electric trucks the credits are $7,000 purchase/$3,500 lease, $10,000 purchase/$5,000 lease, and $20,000 purchase/$10,000 lease, respectively. All of these tax credit amounts will decrease in 2020.
|Connecticut||Hydrogen and Plug-In Electric Vehicle (PEV) Rebate||
Rebates for the purchase or lease of all-electric vehicles and plug-in hybrid electric vehicles. The amounts are based off battery capacity: $3,000 for PHEVs with battery capacity greater than 18kWh, $1,500 for batteries between 10kWh and 18kWh, and $750 for batteries less than 10kWh.
For AEVs, the rebate amounts are the same but the battery cut offs are greater than 25kWh, 20 to 25kWh, and less than 20kWh. In addition, the rebate covers hydrogen fuel cell electric vehicles with a flat rebate of $5,000.
|Delaware||Alternative Fuel Vehicle (AFV) Rebate||Rebates for vehicles purchased between November 1, 2016 and June 30, 2018. AEV purchases receive a rebate of $3,000 and PHEV purchases receive $1,500.|
|Electric Vehicle Supply Equipment (EVSE) Rebates||Offers rebate amounts for 50% of the cost of a residential charging station and 75% of the cost of commercial and workplace charging stations.|
|District of Columbia||None available||None available|
|Florida||None available||None available|
|Georgia||Electric Vehicle Supply Equipment (EVSE) Tax Credit||Eligible business enterprises receive an income tax credit for the purchase or lease of EVSE when the equipment is in the state and open to the public.|
|Hawaii||None available||None available|
|Idaho||None available||None available|
|Illinois||Electric Vehicle Supply Equipment (EVSE) Rebates||Covers 50% of the cost of equipment and installation of charging equipment with SAE J1772 or CHAdeMo connectors. This rebate is up to $3,750 per networked single station; $3,000 per non-networked single station along with larger rebates for larger dual and fast charge stations.|
|Indiana||None available||None available|
|Iowa||None available||None available|
|Kansas||None available||None available|
|Kentucky||None available||None available|
|Louisiana||None available||None available|
|Maine||None available||None available|
|Maryland||Electric Vehicle Supply Equipment (EVSE) Rebate Program||Offers individuals $700 for the cost of acquiring and installing qualified charging equipment.|
|Plug-In Electric Vehicle (PEV) Tax Credit||As of July 1, 2017 allows purchasers of qualified vehicles to apply for a tax credit of up to $3,000 calculated as $100 per kWh of battery capacity.|
|Massachusetts||Massachusetts Plug-In Electric Vehicle (PEV) Rebates||Rebates of up to $2,500 to customers purchasing or leasing a plug-in electric vehicle. The rebate application must be submitted within three months of the customer's purchase or lease date.|
|Michigan||None available||None available|
|Minnesota||None available||None available|
|Mississippi||None available||None available|
|Missouri||None available||None available|
|Montana||Alternative Fuel Vehicle (AFV) Conversion Tax Credit||Income tax credit of up to 50% for the equipment and labor costs of converting vehicles to alternative fuels including electric. The maximum credit is $500 for vehicles with a gross vehicle weight rating (GVWR) of 10,000 pounds (lbs.) or less and $1,000 for vehicles with a GVWR of more than 10,000 lbs.|
|Nebraska||None available||None available|
|Nevada||None available||None available|
|New Hampshire||None available||None available|
|New Jersey||Zero Emissions Vehicle (ZEV) Tax Exemption||Exempts AEVs (not PHEVs) from state sales tax and use tax when these vehicles are sold, rented, or leased in the state.|
|New Mexico||None available||None available|
|New York||Plug-In Electric Vehicle (PEV) Rebate Program||Rebates of up to $2,000 for the purchase or lease of eligible new plug-in electric vehicles. The amounts vary based on the vehicle's all electric range and suggested retail price.|
|North Carolina||None available||None available|
|North Dakota||None available||None available|
|Ohio||None available||None available|
|Oklahoma||None available||None available|
|Oregon||Alternative Fueling Infrastructure Tax Credit||Residential tax credit for 25% of alternative fuel infrastructure project costs including electric charging of up to $750 and the credit is available through the end of 2017.|
|Pennsylvania||Alternative Fuel Vehicle (AFV) and Hybrid Electric Vehicle (HEV) Funding||Rebates to assist with the incremental cost of the purchase of all-electric vehicles and plug-in hybrid electric vehicles. The rebate amounts are $1,750 for qualified EVs and $1,000 for qualified PHEVs and are available until 250 rebates are disbursed.|
|Rhode Island||Plug-In Electric Vehicle (PEV) Rebates||Rebates to state and municipal agencies for the purchase and installation of publicly accessible Level 2 or DC fast chargers. Agencies are eligible for up to $60,000 in incentives for charging stations that are installed and operational on or after July 1, 2016. Agencies that install EVSE also qualify for up to $15,000 to support the purchase or lease of a new PEV acquired on or after July 1, 2016.|
|South Carolina||None available||None available|
|South Dakota||None available||None available|
|Tennessee||None available||None available|
|Texas||Clean Vehicle Replacement Vouchers||Provides vehicle replacement assistance for qualified individuals in the amount of $3,500 toward the purchase of a hybrid electric or battery electric vehicles.|
|Light-Duty Alternative Fuel Vehicle Rebates||Program for the purchase or lease of new light-duty vehicle powered by compressed natural gas, propane, hydrogen, or electricity. Electric vehicles powered by a battery or hydrogen fuel cell are eligible for a rebate of $2,500, for the first 2,000 applicants.|
|Utah||Qualified Heavy-Duty Alternative Fuel Vehicle (AFV) Tax Credit||Tax credits for heavy duty electric vehicles with $25,000 in credit available in 2017, $20,000 in 2018, $18,000 in 2019, and $15,000 in 2020. At least 50% of the qualified vehicle's miles must be driven in the state and the credit expires at the end of 2020.|
|Vermont||None available||None available|
|Virginia||None available||None available|
|Washington||Alternative Fuel Vehicle (AFV) Tax Exemption||Sales tax exemption, applies to up to $32,000 of a vehicle's selling price or the total amount of lease payments made. This exemption expires July 1, 2019.|
|West Virginia||None available||None available|
|Wisconsin||Alternative Fuel Tax Refund for Taxis||Allows vehicles that transport passengers to be reimbursed for the paid amount of the Wisconsin state fuel tax. Refund claims must be filed within one year of the fuel purchase date.|
|Wyoming||None available||None available|